The critical importance of your supply chain has never been more apparent. Business conditions are changing rapidly, making it imperative that logistics services be both reliable and flexible. Many of the processes that worked well just last year may no longer be viable, and new ways of moving products are being explored like never before.
If you are looking for new or additional logistics partners to handle your evolving needs, there are several key questions to ask as you conduct your search.
1. Are potential partners interested in the specific needs of your organization?
It’s important to determine early on if a logistics provider will be able to keep up with your changing business needs. Unless they show a willingness to develop an alignment with your culture, products and people, it is unlikely they will be able to provide strategic insights that will strengthen your supply-chain operations. Partner-minded providers are going to be transparent and open to collaboration to handle challenges as they occur.
You should expect such a partner to have created an environment that welcomes and nurtures its team, leading to strong client retention rates. Invest time in understanding this with your prospects.
2. Is the logistics partner focused both on your current needs and what you’ll be needing in the future?
A long-term partner must have the ability to scale with your growth, and to develop innovative solutions that will support the changes your customers require. Base your evaluation on how likely a logistics provider would be relevant to your company in three to five years. You don’t want to get one year down the road and find you’ve outgrown them.
Engage them to determine if they look at the bigger picture, wanting to know what to expect down the road. Take a good look at their network (size, locations, capabilities) to know if they can handle the type of growth you envision.
3. What is their value?
Cost is important, but so is value. There are a number of ways to determine a potential partner’s value:
-Industry experience, and experience within your fulfillment requirements—Ask for case studies or relevant examples of who a provider has managed with needs similar to your own.
-Growth rate during the past five years—This can tell you if the organization has ambition, and if it has successfully managed through growth challenges.
-Level of interest in your organization—Are they willing to visit your facilities, meet your team, and observe your business in motion? Do they want to be hands-on; does it seem as if they will care about their relationship with you from the start? Do they talk about your business as though they are part of it?
-Innovation—Look for a logistics partner who has taken some risks and implemented advanced technology within their own facilities. Even if that technology is not applicable to your needs, it demonstrates that they have implementation experience, that they can determine ROI, and—above all—that they can take your business to the next level. Technology has become a key differentiator as it has become more difficult to attract labor, and as speed-to-market has become a fundamental necessity.
-Fulfillment capability—To meet as many of your needs as possible, any candidate logistics provider should have a strong retail fulfillment and compliance record and offer DTC fulfillment through various channels. Whether you are currently offering e-commerce or traditional retail channels now, it’s likely that your customers will demand both in the future, so look for providers who can handle both. This will eliminate the potential need for two separate providers, each handling one of these two channels. We have seen instances where that structure results in stranded inventory at one site, while stock-outs are occurring at another site.
4. Do they ask the right questions?
Look for the partner who is genuinely interested in asking about you, your team, and your business. It might seem intrusive, but you will benefit most from a logistics partner who wants to know as much about you as you want to know about them. This will enable them to understand all the details about your specific operations so they can be confident that your business is a good fit for their capabilities. The proposals that result from this level of engagement will incorporate all the components necessary to fulfill your needs and reduce the risk of failure.
This approach also demonstrates a commitment to transparency that will make your ongoing business relationship much stronger.
5. Are you going to be fair?
Look inward to evaluate if your company will be a good and fair business partner. If not, it’s difficult to expect the same of a logistics partner.
You will, of course, view price as an important factor. When you do side-by-side proposal comparisons, however, step back and consider what each provider’s prices says about them. Is it “too good to be true?” Or, is one provider’s price so different from the others that it raises questions? If so, it might be worth giving qualified candidates an opportunity to explain their price. Their response can demonstrate a unique and valuable strategic outlook and equip you to make a better decision. It might also prompt you to ask others to fill in gaps in their evaluations.
Your time spent at this stage is worthwhile. This decision will have long-lasting consequences and, if made correctly, sets up your business for long-term success.
6. Is the provider’s recent history of onboarding new clients successful?
Early go-live success is key to keeping your business fluid, even during the transition to a new provider. Your customers should either not recognize that a change has occurred or, even better, comment favorably on improved supply-chain results.
Don’t be surprised if your new partner aggressively drives the implementation timeline and even makes some reasonable push-back on issues that risk the success of your go-live period. If they have a developed plan with clear details that outlines integration testing and validation, the likelihood of a successful implementation and go-live is much greater.
Ask to see their implementation plan and any documents they will provide prior to client onboarding. Knowing this in advance will help you plan and reserve the resources you’ll need to support an effective process.
If you devote the effort and take the time to engage prospective logistics partners in a transparent, thorough and strategic proposal process, you will find the effort to be worthwhile. That’s even more important today when so much uncertainty creates additional pressure to satisfy your customers’ rapidly changing needs. With a strong and flexible provider of logistics services, your chances for success in this dynamic time will be greatly improved.
Casey Nofziger is the director of Business Development at ODW Logistics, a Columbus, Ohio-based 3PL and warehousing services company with facilities in that state as well as California, Illinois and Missouri.